Friday, March 26, 2010

Disneyland Provides The Cure For Brain Damage?

The stock price of Walt Disney (DIS) has staged a nice V-shaped recovery, and erased the brain damage by Lehman's Psychopaths made in 2008. Disney runs, of course, a global business ...

Click on chart to enlarge, courtesy of Reuters.

It is interesting to see how the US consumer is getting around, as there is so much hope right now in the markets.

Click on chart, courtesy of CLSA Asia-Pacific Markets.

Despite all the hope, Christopher Wood, the strategist at CLSA Asia-Pacific Markets, wrote yesterday:

The data suggests that the annualised 2.2% pick up in real consumer spending in the past two quarters has been driven by tax cuts and transfer payment benefits. Personal current transfer receipts rose by 14.3% YoY in 4Q09 while personal current taxes declined by 25.8% YoY. This consumption pick up is not ultimately sustainable unless underlying income growth or wage growth revives, of which there is as yet scant sign. Thus, while real disposable personal income has risen by 1.5% over the past two years as a result of tax cuts and transfer payment benefits, real wages and salaries have declined by 6% over the same period.

Very Keynesian? There are some grounds for optimism on capital expenditures in corporate sector... and some (all buyers of equities today?) believe this will revive the consumer spending thereafter, as corporate sector starts hiring again.